Expressing hope that Türk Loydu’s IACS membership will be approved on the 100th anniversary of our Republic, Cem Melikoğlu, the Board Chairman of the Türk Loydu Foundation, spoke to us about the importance of digitalization and its benefits to the Turkish maritime sector
Could you give us an update on the status of the IACS membership? How close is Türk Loydu to IACS membership?
As a world classification organization, the International Association of Classification Societies (IACS) has a rate of nearly 98 percent. It holds a very large commercial market and naturally, it does not want to share it with others. However, they cannot prevent candidates who expressed their interest in a membership from becoming members; therefore, they keep the membership criteria as high as possible.
We first applied for a membership in 2017. That year, prior to the completion of audits, they made the membership criteria harder because our membership process was going well. There is an obligation to fulfill rules based on GBS (Goal-based standards) by the IMO; to block us, they added that to the list as an approval each candidate needs to receive.
Since we were expecting such a move, we had already prepared ourselves for GBS and secretly made our preparations to receive approval from the IMO. A few weeks after IACS announced this rule, we applied to the IMO. IACS handled our audits in a year and we received our GBS approval from the IMO in December 2019. IMO announced IACS as the classification organization and Türk Loydu to the entire world. This is an important accomplishment. We put on a serious fight there, we had to conduct lobbying activities as well as backstage politics. After this stage, we made our official application for IACS membership, however we were unable to continue our audits which had already begun in 2020 and 2021 due to the pandemic. This year, in 2022, we got an early start on this. It has gone well so far, and audits will likely be finalized around September. Non-IACS members are audited twice in comparison to members. Yet, our team was very well prepared, we want to finish this business this time. I can tell that we are better than many IACS members on a technical aspect. We are assertive but technical sufficiency is not enough for IACS membership, there is also the political aspect. We are already getting help from our ministries on this matter, but we will speed them up during that process.
If the audits are completed with a positive outcome this year, the IACS board of directors will need to make a decision, and the situation will become clear after that. I expect the status of the membership to be determined at the end of this year. In 2023, I wish to go to the general council as an IACS member organization. I hope that we will be a classification organization suitable for the 100th anniversary of our Republic.
We also have a Plan B and Plan C in case we do not become an IACS member. There are areas in which Türk Loydu is successful at, we have alternative plans such as establishing different paths, different units and finding our place in those. However, the most ideal one for us is obtaining IACS membership. This is how we will be most helpful for Turkish maritime.
How do you conduct/manage the digitalization process? Are there any new digital transformations planned?
The world is changing, we need to use the developing and advancing technological opportunities. What 300 accountants used to do before can now be done by pressing a single button on a computer. We need to digitalize our survey techniques as much as possible and speed up the processes. We already started this effort in 2015. We expedited the approval stages within our internal processes and prepared special soft data to ensure maximum digitalization, easypass was one of them. We receive plan approvals from our clients online, on a digital environment, they are reviewed on the screen, their remarks or different requests, if they have any, are notified and reported to the client on the same digital environment. Back in the day, these were received in folders as files of documents, they were opened and reviewed. Now, all of this can be done much more quickly.
The second stage is for our surveyors to move around in the field on a digital platform. We have already moved on to the remote survey level, since we were already prepared when the pandemic broke out; and we already tested our first applications, we were able to adapt in a very rapid pace. We were able to keep the number of our staff working from home at a maximum level during this process. With the help of digitalization, the speed of our processes increased, and our performance as well as our productivity increased even further. While we keep digitalization at a maximum, we also need to keep the information level of our surveyors at a maximum as well. We had started a surveying school for the education of our surveyors. We accomplished a first in Turkey, and I don’t think there are any comperables in the world either. Engineering students matriculating at the İstanbul Technical University (ITÜ) can minor in surveying, meaning not only naval engineering students but also other engineering students can minor in surveying while they continue their education. This is a one-year program, and the Türk Loydu’s leading capable employees are assisting with the teachings. When these young fellows graduate, they will also have a surveying degree at hand. This is a very unique and beautiful effort. Prof. Dr. Hakan Akyıldız, a member of our board of directors from ITÜ, has played a great role in this. This is a very positive effort for us because Türk Loydu is a place where all classification organizations in Turkey actually use as a school. Nearly 80 percent of other classification organizations originated from Türk Loydu. Because we train our valuable engineer friends here, we ensure they receive surveying competencies, then they take them from us. So, we said, since we already act as a school, let’s make this school more organized, faster and efficient under a university.
The pandemic allowed us to both test and also develop our digitalization process. We are doing the same in other areas, especially in military projects right now. We develop our military rules in particular as software. These will expedite our designers’ work and make it easier for them. It is not easy to compete on the international arena, DNV has a one-billion-dollar revenue and nearly 30 thousand staff members. The team and budget they have for such digitalization is much much larger than ours. We are trying to both compete with them and also produce results equivalent in value, as much as our strength allows. Yet, things are going well so far, we’re doing pretty well.
How are you contributing to the development of national production, in terms of expediting the approval process?
It was important for us to digitalize, presenting certain things in pages and pages of papers and files was making the processes more difficult. Getting, reviewing and finalizing these electronically and quickly is to everybody’s advantage. Other than that, when you have an export-oriented certification, the government gives you certain incentives. When you can prove that the fee you spent for documentation is aimed at exporting, the state gives you 50 percent of it as a grant. Türk Loydu’s documents were within this context. We offer companies as much guidance as we can. Industrialists view every extra expense during production as a burden, but I can easily tell you that our certification fees are very low compared to rival organizations and they are internationally accepted.
In the future, will the maritime sector face new regulations regarding classification rules, are there any subheads they need to be prepared for?
Türk Loydu has been implementing IACS standards for a long time already. We have incorporated IACS rules in our own rules as if we are IACS members, and we use those rules. Therefore, Türk Loydu rules will not change drastically after we become an IACS member. However, there are applications announced around the world, by the IMO in particular, on air pollution, water pollution and reducing emissions. Everybody on a global scale needs to implement these, we do as well because a ship which does not abide by these cannot enter a lot of ports in Europe and around the world. Turkey should use this as an opportunity and renew its commercial fleet. I hope that the Koster Project will come up in the agenda again on a greater extent very soon. The world is changing, freight fees have started to go up, this is an opportunity and if Turkey can use this opportunity as a national strategic move, it can secure the freight profits in the Mediterranean, Black Sea, and near Africa trade. We are currently paying a significant freight fee for products imported into our country and this freight goes to other vessels. If you abide by the renewed rules, the new mission and even the soon-to-be-implemented underwater noise pollution rules, if you can develop a more modern and more productive fleet, you will capture this market. While capturing this market, the Turkish subsidiary market will also become stronger, and if you were to do this systematically, not only shipyards in Turkey but also many sectors that serve the shipyards will rise up. There is a difference between producing one ship and 100 ships, if you can make plans for 100 ships your cost will drop drastically.
Each day we witness a new green fuel technology. How prepared is Türk Loydu for green fuel?
I am a chairman who likes very much to sign off on firsts, and I have a warm approach towards matters on developing innovation, and I support them as much as I can. Türk Loydu signed off on the world’s first electrical trailer. There was an electrical ship but not a trailer, because electrical trailers require a high level of power and it was difficult to resolve the power source issue. Turkish engineers solved this; this is an important accomplishment. Field tests on the world’s first fully electrical trailer named ZEETUG have been done, Türk Loydu provided its plans and classification. This trailer received many international awards. The fact that Türk Loydu was involved in this makes me very happy. But more importantly, we developed our rules for an electrical ship thanks to this. In fact, we assisted in the issuing of the guidelines regarding electrical ships in Turkey, because the development and advancement of Turkish maritime is among our divine goals. Research on hydrogen, LNG, LPG, and even hydrocele are underway.
We request the students we’ve given scholarships to for years to have certain areas on their postgraduate and graduate degrees and we encourage them. We try to select the students we give scholarships to from those particular areas so that the projects that will come out will have industrial benefits as well. This effort continues as well, developing rules is not such an easy thing to do, it requires a lot of effort. You need to conduct academic studies at universities in particular, you need to conduct field studies, you need to be in unity with the sector. Türk Loydu has been away from these for a long time, we are now progressing there as well. We are involved in serious studies both within the defense industry and the commercial areas.
Autonomous and 3D efforts are among current topics that are under rapid development. What is Türk Loydu doing in these areas?
A Research & Development department was established within Türk Loydu. In the past, there was an idea to conduct research & development services through a separate company, and a separate company was established but later on, a law passed allowing this to exist within Türk Loydu itself. Therefore, we decided that it would be more appropriate to conduct research & development services within Türk Loydu as opposed to a separate company. One of our floors is currently reserved solely for the Research & Development department. We have nearly 14 ongoing projects. Some of these are regarding autonomous ships and remote surveying conventions. We conduct many different efforts simultaneously. Without digitalization, there is no progress, you will be left behind in this game. You need to prepare yourself for new technologies and learn how to use new technologies in the most efficient way. It is not enough to implement these; it is also necessary to try to do these better every day because your rivals are never going to stop. Whoever does it better, whoever makes it more efficient will take the lead. Our efforts continue very successfully.
As a result of Turkey’s years-long efforts, our defense industry has become stronger. The maritime sector is putting in the work for the defense industry as well. What are Türk Loydu’s efforts in this area?
Our defense industry is in fact our source of pride and Türk Loydu’s point of honor. Our general manager Lütfü Savaşkan has a great role in this, I need to emphasize that. Türk Loydu’s vice presidency and later on presidency in the International Naval Ship Classification Association (NSCA), its election to be a council member within the International Naval Safety Association (INSA) and the important roles it has taken on are extremely valuable. The rules set forth by these organizations are adopted as is by the NATO and implemented so when you are there, you become one of the rule setters. Other classification organizations all establish working commissions and such, they draft their rules and they are implemented. If you do not actively participate in those commissions, working groups, you become one of those who simply adopt and implement the rules set forth by the rule setters. Therefore, it is very important for Turkey as well to have an active role there. Turkey did business in many areas of the defense industry after MİLGEM but has also done quite a lot in maritime. For instance storm boats were developed, 140 of them were exported, there is a Kyrgyzstan, Turkmenistan, Ukraine project, a Ukraine project still continues despite the Ukrainian-Russian war, there is a Pakistan project, Qatar project as part of which agreements were signed for two constructions there and two here. These all have Türk Loydu classifications. What does this mean for us? First of all, we export Türk Loydu rules along with ships, so we offer exportation of services. This is the most profitable exportation; I call this exporting the sweat of intelligence. It is the export with the highest value added but on the other hand we are opening the path for Turkish subsidiary industry products classified by Türk Loydu, this is what excites me the most. Once these ships are built, they will receive subsidiary industry replacement part services for years, it won’t stop there, after that they will want another piece because in comparison to its rivals, the ships built by Turkey are both more reasonably priced and also are of better quality. I can say that we have come to a better point than our rivals with improvements and technical innovations during the process. This is how Turkey’s exports begin and advance. With MİLGEM, which began as a dream in 1996, we have entered the world’s top 10 countries assertive in the defense industry. This is a great success; it is one of the paths that Türk Loydu needs to continue on.
Ships which produce energy and sell it to primary regions as electricity are also being developed. What is your level of competency on this matter?
Turkey is already building ships which produce electricity from fuel oil through Karadeniz Holding right now. Floating power plants are also another success story. My dream is to build nuclear ones with Türk Loydu classification. But nothing can happen without putting in the effort, the work and these are topics that can be developed with joint efforts with certain organizations. There is no reason for them not to happen in the years to come.
Meanwhile, we are also working with TPAO. They are trying to extract the natural gas in the Black Sea with the help of a new technology. We are involved in that effort; it is moving forward very rapidly.
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